May 18, 2011

Host: Ted Simons

Papago Golf Course/AZ Golf Industry

Arizona golf journalist Bill Huffman reports the state of Arizona’s golf industry and turmoil at the Papago Golf Course which has prompted city of Phoenix to consider looking for a new manager of that municipal course.

Ted Simons: Good evening and welcome to "Horizon." I'm Ted Simons. A ground breaking today that's been 100 years in the making. State and local officials broke ground for a project to turn part of Washington street into centennial way in honor of Arizona's upcoming 100th birthday. The $7 million project will renovate a mile-and-a-half of Washington with landscaping, repaving, shading and displays honoring Arizona's 15 counties and 22 Native American tribes. In 2007, the city of Phoenix hired the Arizona golf foundation, the management arm of the Arizona golf association, to renovate and operate the deteriorating Papago golf course. But that relationship has deteriorated to the point that the City is now attempting to find a new management company to run the course and resume the restoration. Joining me with more on the story is long time valley golf writer Bill Huffman. He hosts the radio golf show "Backspin" and he writes for AZGolf.org, the Arizona golf association's website. Good to see you again.

Bill Huffman: Ted, it's always a pleasure and let me tell you I'm always impressed when I am on a show with a former radio guy who now is in TV.

Ted Simons: Well, that's good to hear. It's good to see you again. We go way back. I remember years ago you wrote for the Republic -- you know the ins and outs of what's going on here in the valley in terms of golf. I want to get the state of the golf industry with you in a second here. But why is the city of Phoenix wanting to cut ties now with the operators of Papago?

Bill Huffman: Well, they think that after a couple of years of just one thing going wrong after another that it's time to let somebody else have a chance at it. And complete the project, build the clubhouse, get the course in the shape that it was, you know, originally meant to be in when they took on this, you know, $10 to $12 million renovation project.

Ted Simons: Talk about that project. Let's go through the time line here of what happened. First of all, why was this outsourced in the first place?

Bill Huffman: Well, because the city of Phoenix couldn't do it. The city of Phoenix has never really taken over their control of their golf courses. It's always been an operator basis where you have someone come in, make a bid and they run the course and give whatever residuals there are to the city. So it's never been a very profitable operation in all honesty. It's been an even tougher in the last 10 to 20 years because you have got so many great public golf courses that have been built here in Arizona, and kind of flooded the market so to speak, which has taken away a little bit from the Papagos, Cave Creeks, Maryvilles, Encantos and those types of courses but basically it was the city opened it up for bids and they had three finalists. Lyons Golf which wanted to take the whole Golf Course down and build a new clubhouse and assume all operations. But they wanted to change the Golf Course. Then there was the Bellows group who wanted to come in and renovate it six holes at a time over time. So it wouldn't be done all at once. It would be done in three years at six holes at a time. And then there was the Arizona Golf Association who put it into their Arizona Golf Foundation. They wanted to restore what William F. Bell, William Francis Bell had originally created, and the city lined up with that goal and said, we want what was originally there more than anything else & they gave the bid to the Arizona golf foundation.

Ted Simons: And they get what, $12.5 million in loans, $10 million of which were spent pretty much, anyone who has been out there, if you are a golfer you know Papago in one way shape or form. A lot of trees cut down, lakes moved, that sort of thing. But what do you think of the renovations out there? Was this what Papago, the city of Phoenix, the golfers had in mind?

Bill Huffman: It's been a mixed reaction in all honesty. There's a group of people who play there called save Papago. They have been very vociferous of the criticism of the Arizona Golf Association didn't have the management background to run the golf course. But the AGA or the AGF didn't really run the golf course. It was run by another group of guys out of Portland, Oregon, called the Golf Guys and they were in charge of basically the budget and they kind of, in all honesty, ran a little bit amuck. And as a result, you had three different factions -- the city, the management group, and those people trying to renovate it all -- all kind of at odds with each other. The city ended up siding with the golf guys, and let them take it on for another year or two after they probably should have cut and got a new operator in there. But they stuck with them and now they are at kind of a crossroads situation where someone's going to have to come in and kind of clean up the mess.

Ted Simons: Is there someone out there ready to come in and clean up the mess?

Bill Huffman: I think there is. I think a group like OB sports which is a managment group here in Scottsdale, I think they would do a nice job. They have done a lot of work with public facilities. Right now, they're kind of renovating Sadona golf resort which a lot of people are familiar with. That course fell in disarray, and they have come in and done a nice job of fixing the irrigation system and doing all those kinds of things. But I don't think the people that have play Papago over the years, and I know you are one of them, I don't think they are going to be satisfied with Papago being done until the clubhouse is complete, because there's something about not having a clubhouse that makes a Golf Course kind of, you know, not complete.

Ted Simons: Well, the thing was torn down. It was an interesting little building. It was certainly -- charming.

Bill Huffman: Very interesting.

Ted Simons: It had its own charms but they tore it down and then built nothing. What happened there?

Bill Huffman: You know, I think they were originally planning on building the clubhouse. But like I said, the two groups got at odds with each other and couldn't agree on anything. And as a result, about $2.5 million that didn't get spent that would have probably gone to a clubhouse just sat there. Because of everybody was at odds. Now, there was some other extenuating circumstances. The old clubhouse, as I mentioned to you earlier, was filled with asbestos which needed to be torn down. There was problems with the restrooms. You know, what people I don't think remember about Papago is when, you know, when I was at the Republic, I wrote about fixing up Papago. When I was at the Tribune, I wrote about fixing up Papago. It needed fixing up for 10-15 years. There was a former mayor, I think his name was Drigs, and he wanted Papago restored and there was a lot of movement here to fix the Golf Course. Because it is a classic Golf Course.

Ted Simons: It is.

Bill Huffman: You know? William Bell did it. He did Torrey pines. It's a great Golf Course. It's special compared to the other Golf Courses in the city’s rotation. So there was a large movement to restore Papago, and the Arizona golf association took it on, I think with a noble eff-- it was a noble gesture on their part to want to fix up this classic Golf Course, but, you know, the fact that the economy almost went bad at the same time, not just to Papago. A lot of Golf Courses. And the fact that, you know, they ran into this kind of reaction from the people who had been playing it. It was a negative reaction. And the fact that they actually didn't use it after they fixed it up. The AGA really wasn't involved in playing their tournaments there and doing their clinics there and moving the first tee there and all that kind of stuff. So this is just one of those kind of things that, you know, everything that could go wrong almost went wrong.

Ted Simons: Let's take a broader view now. We have seen Papago. We will see what happens as far as getting someone else in there and maybe lowering some greens fees there because, boy, they sure shot up when this whole thing happened. Let's take a broad view of the Arizona golf industry. The economy, it's obviously a major factor. The real estate situation is a factor when it comes to golf in Arizona, isn't it?

Bill Huffman: Well, the prices of Golf Courses have plunged. I mean, we are talking 90% in some cases. You have courses that cost millions, tens of millions, being sold for $1, $2, $3 million. It's amazing the way the values of Golf Course have just shrunk. That still isn’t the way they make money on Golf Courses. You don't make it as an investment. You make it as -- you are taking in your daily fees and doing the bottom line and you need 40 to 50,000 rounds to make money on a Golf Course. So what's happened is, we have really kind of bounced back this year. But what's bounced back most has been the higher-end Golf Courses and that’s because the tourists came back to Arizona a little bit this year. The hotels were full. We just saw that. But you know golf is the number one amenity of tourism so therefore it's just a trickle down effect and what's happened is, the better Golf Courses in the valley this year all had like the best years they have had in five years. I mean, no one ever comes out, I just saw an article this week in the paper about how the hotels and resorts have done so well. But it's rarely do you see anyone writing anything about the golf industry saying they have done really well this year too and they have.

Ted Simons: OK. Are they too expensive as far as green fees are concerned? For those of us who live here year round.

Bill Huffman: They are except that a lot of the operators of the higher end public Golf Courses have made it affordable through cards and internet specials and things like that for people to play. You can, even in season, find a Golf Course from time to time at about half of the rack rate as they call it.

Ted Simons: Last question. Is -- can the golf industry change in the sense of personally? I like laying nine holes. I'm not crazy about losing an entire day, as much as I lose the game, or getting through a round more quickly. Can golf change? Can golf do something to get that going so people maybe feel -- it's a go-go world. 20 years ago it's great to spend all day. Some folks can't do that anymore. Does that make any sense? Is there a way to change the nature of the game?

Bill Huffman: It's already happening. The time constraints have forced people to play less and less. But you are seeing the, it's already happened at the private clubs. And it's happening a little bit more at the public level. What I have noticed is they are trying to make the game easier to play by, you know, like courses like true north have an express tees where they have moved the tee is like halfway between what it would be, and it's for golfers of higher handicaps. But they are also offering nine-hole fees. A lot of instruction is now connected to nine holes of golf. They don't take people out and play 18 after they show them how to play. They take them out and play nine because that's really all they can handle. Your situation is different. You are under a time constraint. So you are going to find, you are going to have to find places where you can play where you can get that. But in all honesty, it's already beginning. And I think you are going to see it in the future more and more and more.